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MKS Instruments updates price talk on U.S. and euro term loans
By Sara Rosenberg
New York, Oct. 20 – MKS Instruments Inc. revised price talk on its $4.28 billion seven-year covenant-lite term loan to a range of Libor plus 225 basis points to 250 bps from just Libor plus 250 bps and tightened the original issue discount to 99.5 from 99, according to a market source.
Also, the discount talk on the $1 billion equivalent euro seven-year covenant-lite term loan was changed to a range of 99 to 99.5 from just 99, the source said.
The U.S. term loan still has a 0.5% Libor floor, the euro term loan is still priced at Euribor plus 275 bps with a 0% floor, and both loans (Ba1/BB-/BBB-) still have 101 soft call protection for six months.
JPMorgan Chase Bank, Barclays, BofA Securities Inc., HSBC Securities, Citigroup Global Markets Inc. and Mizuho are the leads on the deal.
Commitments are due end of day on Thursday, the source added.
The company is also planning on getting a $500 million five-year asset-based revolving credit facility.
Proceeds will be used to help fund the acquisition of Atotech Ltd. for $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech common share, and to refinance existing credit facilities. The equity value of the transaction is $5.1 billion, and the enterprise value is about $6.5 billion.
Other funds for the acquisition will come from cash on hand.
At close, pro forma gross leverage is expected to be around 4.4x and net leverage is expected to be around 3.7x, based on LTM second-quarter 2021 adjusted EBITDA of $1.208 billion.
Closing is expected in the fourth quarter, subject to Atotech shareholder approval, approval of the Royal Court of Jersey, regulatory approvals, and other customary conditions.
MKS is an Andover, Mass.-based provider of technologies that enable advanced processes and improve productivity. Atotech is a Berlin-based specialty chemicals technology company.
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